HOOD Stock at $90 – Bargain Recovery Play or Overvalued Brokerage Stuck Between Two Worlds?

The timing of Robinhood’s 2021 IPO was almost comically bad. The company, which had built its entire identity around making trading accessible and democratic, found itself explaining to Congress why it had restricted trading in GameStop at the exact moment its users wanted to buy, as the meme stock frenzy that had momentarily made the app feel like the center of the financial universe was already cooling and regulatory scrutiny was growing. The price of the IPO. The stock dropped. For a while, it appeared that Robinhood might be one of those businesses that people remember more for a fleeting cultural moment than as a long-lasting enterprise.

The complexity of that tale has increased significantly. On April 17, HOOD closed at $90.75, up 111% over the previous year and 4.49% in a single session. This performance would have seemed extremely optimistic to anyone watching the stock trade close to $39 less than a year ago. This week’s catalyst is a regulatory gift that hardly anyone anticipated: the SEC lifted its $25,000 minimum balance requirement for pattern day traders, doing away with a rule that had prevented smaller retail accounts from engaging in frequent trading for decades. This is about the most advantageous policy change that anyone could have drafted on behalf of Robinhood, whose whole value proposition is based on enabling active trading for individuals without $25,000 in a brokerage account.

The market has responded in line with Goldman Sachs’ and Bernstein’s assessments that the rule change will significantly improve Robinhood’s growth prospects. With an Outperform rating and a $130 price target, analyst Gautam Chhugani of Bernstein is arguably the most outspoken institutional voice on HOOD at the moment. This suggests that the stock will rise by about 50% from its current trading level. His thesis is based on a few key beliefs: that the current stock price already fully reflects the weakness of Q1 2026; that Bitcoin is setting a price floor ahead of a significant recovery in the cryptocurrency market in Q2; and that Robinhood’s prediction markets business is expanding more quickly than most people realize.

According to Bernstein, market revenue is expected to grow by 286% annually to approximately $586 million in 2026, which is 31% more than the Street consensus. These are aggressive figures, and it’s important to remember that at different points during the same business cycle, aggressive forecasts in high-growth financial platforms can be both precisely right and exactly wrong.

In one version of this tale, all of Bernstein’s predictions come true at the same time. The SEC rule change causes a spike in active daily traders, cryptocurrency recovers, prediction markets expand rapidly, and Robinhood’s revenue diversification transforms the business from a volatile, cycle-dependent broker into something more akin to a robust financial services platform. It’s an appealing version. It is feasible. And if it turns out that way, the stock, even at $90, would seem like a steal in hindsight. Constructive ratings are being maintained by Truist, Piper Sandler, and Cantor Fitzgerald. Cantor points out that HOOD is trading at about 25 times 2027 earnings, a valuation that appears more justifiable when the projected earnings figure is actually accurate.

The Charles Schwab issue comes next. Schwab announced plans this week to provide direct trading in Bitcoin and Ethereum, stepping into territory that Robinhood has held for years with relative ease. Particularly during bull markets, cryptocurrency has been a significant source of income for Robinhood, and the margin on cryptocurrency trading has helped offset slower times in the stock market. It is a real competitive pressure, not a theoretical one, for Schwab to provide that capability to its much larger and generally wealthier customer base. It’s still unclear if there is a significant overlap between the cryptocurrency user bases of Schwab and Robinhood, or if the populations are sufficiently distinct to allow both platforms to expand without directly eating into one another. However, the cushion of crypto exclusivity is getting smaller.

Beneath all this optimism, it’s difficult to ignore the insider selling. On April 15, Chief Brokerage Officer Steven Quirk sold shares valued at $725,000 as part of a prearranged trading plan that was implemented back in November 2024. Over the last three months, insider sales have totaled about $35 million. Executives can manage their personal finances without violating securities law by using pre-planned trades, and investors frequently make the mistake of reading too much into a single transaction. However, it is important to recognize rather than ignore the tension created by executives selling millions of shares while analysts simultaneously project 50% upside.

It’s like watching a company that has truly grown past its most vulnerable early years but hasn’t yet shown it can hold its ground when serious, well-capitalized competitors choose to compete directly on its home territory. It gained momentum and time thanks to the SEC rule change. If the cryptocurrency recovery occurs in Q2 as Bernstein predicts, it could provide significant revenue boosts. On April 28, Q1 earnings will be released to determine whether the market’s already-priced-in weakness is actually behind the company or if it is still evident in the numbers. More than any analyst note, the answer to that question will determine HOOD’s future course.